Project Risk Management: Identify and Prevent Risk Issues
Prevention is better than cure. Yet we often find that our focus is mainly towards issue resolution but not in its prevention. What are Issues?
Do issues occur in a project because of ineffective risk management practices or in other words can issues be prevented or eliminated in a project by proactive risk management? I opine that however good risk management practices are in a project, issues are bound to occur. There will always be some risks that are hard to detect because of our lack of knowledge in that area and these risks manifest themselves during project execution as issues and influence the course of the project. We can prevent issues from recurrence by analyzing and identifying the appropriate risk category they belong to and recording the risk category in the organization’s Risk Breakdown Structure (RBS) repository.
- Risks Accepted – Project teams accept certain risks with the belief that the impact will not be high. In some circumstances there may be no other option but to accept the risk.
- Risk Seepage – Occurs because of sheer oversight. Risks are identified, analyzed but not monitored or tracked properly.
- Ineffective Risk Mitigation Measures – Risks are monitored and tracked but the mitigation measures fail to dampen the impact.
- Unidentified Risks – Risks that couldn’t be identified due to lack of knowledge. For example, assuming that the Project sponsoring organization and performing organization are working together for the first time, a common scenario could be:
- The sponsoring organization usually takes a long time to provide inputs or signoffs which may result in a schedule slippage. The Performing organization project manager may not be aware of this risk.
- Similarly, the performing organization is usually good in technology but doesn’t understand the business or domain and the sponsoring organization project manager may not be aware of this fact.
At every milestone in a project, the Project Manager should analyze which of the four categories mentioned yields the maximum number of issues and fine tune the appropriate risk management activity. Root cause analysis needs to be carried out for each issue and the source or reason which caused the issue should be classified appropriately. If the underlying data is simple, a basic histogram can help us identify the category which gives rise to the maximum number of issues. For example, from the sample histogram shown in Figure 2 below one can deduce that the Risk Identification needs to be strengthened.
Ramkumar is a certified PMP since Jan 2007. He works for i-flex solutions which is recently renamed to Oracle Financial Services Software Limited. Ramkumar manages medium to large projects in the BFSI space and enjoys thinking, mulling and exploring ideas at work. He can be reached at firstname.lastname@example.org or email@example.com. Note: The thoughts and opinions expressed in this article are his own and don’t reflect those of his Organization.